Buying Engagement Ring Insurance: Everything You Should Know

In this short article, you’ll learn everything you need to know about insurance for your diamond engagement ring.

Insurance is an important financial tool to make sure you can replace your diamond engagement ring if it should be lost, stolen, or damaged.

But you have to know how to do it right, to make sure you get the right insurance for you, and that you don’t have any bad surprises if and when you ever need to use your insurance.

What You’ll Learn

How much does it cost to insure a diamond engagement ring?
Is it worth it to insure an engagement ring?
Does homeowners’ insurance cover jewelry such as an engagement ring?
Where should I get insurance for an engagement ring?

A diamond ring is not an investment per se. I’ve written elsewhere on how you wouldn’t recoup the money you spent on a diamond engagement ring.

I’ll Quickly Recap the Facts Here, and Apply Them to This Insurance Topic

Retail diamond prices are determined by retail supply and demand for diamonds. Diamonds themselves have much less actual resale value than retail cost.
Selling (or buying) a diamond second-hand generally gets a much lower price than retail. You’d be lucky to recoup even 40% of the retail price. That’s simply because the vast majority of people want a new diamond for their engagement. They don’t want someone else’s diamond after some divorce or other unhappy event.
So although some people mistakenly think (and may tell you) that diamonds are an “investment” that needs to be protected, it’s not really like that. Diamonds are never a good investment for return on your money.
But a diamond engagement ring is still worth protecting with insurance.
What you’re protecting by buying insurance is not some resale value of the diamond ring, but rather your ability to replace the lost diamond ring at retail prices.
That’s an important distinction that you should make sure of in any insurance policy you buy. You don’t want a policy that gives you the “value” of the ring. Mere value of the ring would be much less than you’d have to pay in order to replace it. You want a policy that would pay for the cost of replacing the ring at retail prices.

What is Engagement Ring Insurance?

It’s exactly what it sounds like, except that you want to make sure it would cover your purchasing power for replacing the ring at retail prices.

You pay a set amount per month. In return, you get a legal document (a policy) which obligates the insurer to give you enough money to replace your diamond engagement ring if it’s lost or stolen.

You Have Several Choices When It Comes to Insurance for Your Diamond Engagement Ring

Use your existing renter’s insurance or homeowner’s insurance. Through a conversation with your agent, make sure the ring is on it, and at an amount that satisfies you.
Pull the trigger and buy renter’s insurance, if you haven’t already, and through a conversation with your agent make sure the ring is on it at an amount that satisfies you. (If you’re a homeowner, you certainly already have homeowner’s insurance.)
Go through a specialized insurer such as Jewelers Mutual, which sells insurance specifically for jewelry, including diamond engagement rings.
Self-insure. This means that you have plenty of money to pay for the ring should it go missing. Or that you could create that money by investing in stocks that rose until you’d made enough money to cover it. Then you’d keep that money put aside in a CD or other secure investment — just in case. Alternatively, you’d let that investment keep growing, albeit with some risk, in the stock

Renter’s or Homeowner’s Insurance

A common option is to protect your engagement ring through your homeowner’s or renter’s insurance. Here are some advantages and disadvantages of this option:

Advantages of going with your existing renters or homeowners insurance

It may cost less than buying a separate policy from a separate company such as Jewelers Mutual.
It may take less time than going through a specialized jewelry insurer.

Disadvantages of going with your existing renters or homeowners insurance policy

You have to make sure the ring is fully covered to your satisfaction, in writing. This may require a “rider” specifying that.
It could possibly be more expensive than going with a specialized insurer such as Jewelers Mutual. (You just have to compare prices to know for sure.)

Specialized Engagement Ring Insurance

Specialized engagement ring insurance is generally the most effective option when something actually goes wrong. Here are some of the most common pros and cons of specialty jewelry insurance:

Advantages of going with a specialized company such as Jewelers Mutual

In the unlikely event of a theft or loss, your entire renters or homeowners insurance costs most likely won’t go up.
You can feel good knowing you have a specialized policy to cover the ring. That can add to the emotional value of the ring, because you’re acknowledging to yourself and your beloved that this specific ring is important enough to have its own insurance policy.
A specialized jewelry insurance company knows and understands jewelry, if you choose a company wisely. In the event of a loss, you won’t have to explain to them, or argue with them, that you need a diamond which meets specific criteria as your replacement.

Disadvantaged of Specialized Jewelry Insurance

Specialized jewelry insurance will most likely be more expensive than insuring your ring through you homeowner’s / renter’s policy.

“Self” Insurance

Self-insurance may be a strange concept, but it can definitely be something to consider. Here are some pros and cons you should keep in mind:

Advantages of self-insuring

If you can accumulate the extra cash, and invest it in a strong reliable company, you can have the best of both worlds. You can have the ability to buy the ring again if necessary. And you will be earning money on that money ad infinitum.
You can feel good knowing that you have created a specialized investment to replace the ring if it went missing.
You can feel self-reliant.
Your beloved will know and feel that the ring is important, just as if it had its own insurance policy. But you’ll have been the one to handle it all by yourself, and make money in the process.

Disadvantages of self-insuring

If you suffer a loss or theft before you accumulate the capital to cover it, you won’t be able to replace the ring at all.
Until you accumulate enough capital to replace the ring, you won’t have peace of mind.
Until your investment designated for replacing the ring isn’t 100% secure, it could drop in value, leaving you unable to replace the ring if it were stolen or lost.

How to Choose a Specialized Insurance Company for Jewelry

There are several qualities you should look for in choosing an insurance company which specializes in insurance policies for jewelry.

These don’t apply to homeowners insurance companies or renters insurance companies. They won’t be able to meet these criteria. That doesn’t mean they can’t adequately cover your diamond engagement ring. It just means that they might not adequately cover your diamond engagement ring.

But with an insurer specializing in jewelry, you should definitely hold them to the following criteria:

They have a B , or preferably an A, score with the BBB
They have online management of your account. You can log in, make payment, etc., online.
They employ gemologists accredited by the GIA (Gemological Institute of America) or the AGS (American Gem Society).
They make representatives available to explain, and point out in the written policy, that your jewelry is insured at retail replacement cost. Meaning, the amount of money it would take to replace it, from a retailer.

How Much Does It Cost to Insure a Diamond Engagement Ring?

It depends on your address and other factors that the underwriters use.

Ultimately at a specialized insurer for jewelry, it costs around 1% to 2% per year.

So if your diamond engagement ring cost $6,000 retail, the cost to insure it would run around $60 to $120 per year.

Why You Should Self-Insure at Least a Little

If your costs are even at the lower tier, of $60 per year, that’s not terrible. Even $120 per year is not bad.

But those costs add up. It’s real money.

So even if you opt for insurance, you should also find a way to begin to self-insure. Put aside some money every month into a separate investment to be used to self-insure the ring.

Then once you hit $5000 or so in that investment, you can stop sending $60 to $120 per year to an insurance company.

Also Consider

Buying insurance is not the only way to prevent yourself from having to find $6000 to buy another engagement ring.

What are the chances that the ring will be lost or stolen?
Is your beloved generally very good at keeping up with such things?
Do you live in a neighborhood prone to burglaries or robberies?
Could you spend $60 (or less) per month on a burglar alarm, or a one-time cost for a very convenient fingerprint safe in which to store valuables?
Can your renters or homeowners insurance agent demonstrate to you that that policy is adequate, without extra expense?
Are you taking advantage of the yearly free inspections from retailers such as James Allen and Blue Nile? They make sure that your diamond is mounted securely still in the setting.

Should You Buy Shipping Insurance When You Ship It?

The most vulnerable time for a diamond engagement ring is probably in shipping. It’s out of your sight.

Shipping items go missing all the time.

So ask your insurer if the policy covers shipping it back and forth to your original retailer of the ring for annual cleaning and inspection.

If your insurer doesn’t cover that, ask them how it might be added.

Consider buying shipping insurance directly from the shipping company.

When Buying Insurance for a Diamond Engagement Ring, What Questions Should You Ask?

Ask for details of what is covered, including any cleaning, maintenance, or repairs. You’re paying the insurance company’s bills as a customer.

You’re even more their benefactor than you are the governments to which you pay taxes.

So don’t be shy about it. They owe you not only to provide the coverage, but to answer any and all of your questions about it.

Understand exactly how moving to a new location may affect your coverage, especially if you’re moving in with your beloved soon to a different address.
Ask what jewelers or retailers you can turn to for a replacement. You want to be able to have it replaced by the original jeweler, if possible.
Ask about any policy limitations.
Try to imagine anything that could go wrong. What if the diamond fell out? What if a flood washed away all the jewelry into a river? What if an earthquake swallowed it in a crevasse?
Also ask: What if you didn’t have the maintenance done on time and a week later the diamond dropped out and was lost? What if it went missing but there was no sign of an intruder? Do you have to have a conviction in a court of law in order to prove theft? Etc.
Only your insurance agent can answer, since every policy may differ.

Your goal is get as much coverage for any crazy event that may happen. That’s the whole point of insurance.

What Other Details Should I Handle When I Buy Insurance for a Diamond Engagement Ring?

Keep the paper receipts in a file you can find.
Keep digital photos or copies of the receipts in a secure cloud account.
Keep digital photos of the ring in a secure cloud account.
Keep your appraisals secure.
Ask your insurance agent what conditions exist for an appraisal.
Only ever buy a diamond which has a GIA or AGS grading report. Make sure you keep these with your paper and digital files.

Prevent Ever Needing the Insurance

Insurance is great. Never losing the ring is even better. Some suggestions for reducing your actual risk of losing the ring or diamond:

Make sure it fits well, and have it resized if it does not.
Remove the ring before activities during which it could conceivably come off and go missing: boating, swimming, rock climbing, any strenuous use of the hands.
Consider keeping it in a safe when it’s removed.
Keep up the regular cleaning and maintenance by a professional jeweler, so that the diamond doesn’t loosen and fall out.
When shipping it, always use a reputable shipper. Always make sure the shipment is tracked. Keep your receipt for the shipping.

Insurance Is for Peace of Mind

Likely, you’ll never need to use insurance for your diamond engagement ring. But insurance is to give you peace of mind, more than anything.

So make sure that your insurance really does give you peace of mind. You can do that by taking care of these few details, mentioned above.

Yes, it may take the investment of a few minutes to ask all the questions, and to compare prices of various policies.

But it’s worth it, because over the years you’ll have peace of mind when you leave it (locked in the room safe at least) in a hotel room for a rock climbing adventure, or scuba diving. Or just a swim at the beach.